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Drilling is down but Production levels are up

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Working oil rigs fell by 20 this week to 805, according to data released Friday by oilfield-services provider Baker Hughes. Companies have boosted activity just twice in the past 10 weeks. – https://www.bloomberg.com

Investors are more focused on capital returns rather than rapid growth from the oil industry during this boom. this new trend has forced oil companies to cut-back on drilling activities and have maintained a prioritization of cash flows and less focus on growth.

Crude production inched 100,000 barrels higher, back to its record high at 12.2 million bpd, the data showed – according to the Energy Information Administration.

Production levels in Colorado, Oklahoma, and North Dakota each grew by more than 95,000 b/d from 2017 to 2018. In Colorado and North Dakota, this increase was enough to set new record production levels for the year. Production increases in Colorado were driven by the Niobrara shale formation, while continued production in the Bakken region drove increases in North Dakota. Oklahoma’s crude oil production has yet to surpass its record level of 632,000 b/d set in 1967.

 

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Drilling

Drilling permits are down 60% in Colorado

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Five months after the new anti frac law took effect, drilling permits are down 60% from the last decade average, one operator has declared bankruptcy, and 10 local communities have passed moratoriums on new drilling. – denver.cbslocal.com

The slowdown in hydraulic fracturing was expected by some major frac fleet operators, Some operators took the initiative and started laying off workers.

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Drilling

More Oil With Less Drilling Rigs

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According to a recent Bloomberg story: “In June 2014, the U.S. pumped 8.4 million barrels of crude using 1,545 drilling rigs. Last month, it produced about 12.2 million barrels, 45% more, with just 788 rigs.”

For the rest of the industry, this is wonderful news, but for oilfield services companies large and small, these efficiencies have caused severe overcapacity and economic pain. more with less @ fool.com

The U.S Removes 12 Oil Rigs: Oil rig count was 742, down from 754 in the week ended Aug 23. Notably, the tally has never dropped to such a level since early January 2018. In the past nine weeks, drillers lowered the tally eight times. The current total, far from the peak of 1,609 attained in October 2014, is also lower than 862 a year ago.

Severe overcapacity and economic pain?
Halliburton Cuts 8% of North American Fracking Jobs. Christopher Wright Talks About the Slowdown in Fracking

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